Intra-Firm Technology Spillovers Leveraging Co-Evolution Between Digital Technologies And Their Application To Global Warming Mitigation? Towards Ecofriendly Digital Business In A Service Oriented Economy | Ruiko Kato, Chihiro Watanabe & Yuji Tou

The proliferation of information technology (IT) around the world and increasing global environmental consequences of CO2 emissions due to energy use are subjecting firms to co-evolution between technologies for a digital economy and global warming mitigation that leads a way to eco-friendly digital business in a service-oriented economy for their survival strategy. Contrary to its long lasting economic stagnation over the last decade, Japan?s economy has recently shown a new surge of innovation that has been induced by newly emerging digital business initiated by smaller firms with dynamic capabilities rather than gigantic firms. Digital cameras from Canon Inc. and liquid crystal TVs from Sharp Corp. are typical examples. Another noteworthy trend is a dramatic increase in Japan?s photovoltaic cell (PV) production, which in 2004 amounted to a 50.4% share of the world market. This conspicuous achievement, despite a locational disadvantage, can largely be attributed to the advancement of digital technology. Sharp?s notable achievement of attaining a 53.1% share of Japan?s PV production in 2004, up from only 2.0% in 1990, is good evidence of this. These observations suggests the hypothetical view that Sharp has succeeded in accomplishing a coevolution between technologies for liquid crystal and PV by means of intra-firm technology spillover. Given the significant implication that could be extracted from such a business model for a service-oriented economy, this paper, on the basis of an empirical analysis of Sharp?s intra-firm technology spillover between liquid crystal and PV, attempts to demonstrate the foregoing hypothesis.